The institutional and economic interface between small towns and rural economy

Abstract

The relationship between small towns and rural areas has been the subject of research studies since the 1960s. This followed the dismal failure of the two sector development models of the 1950s to uplift the standard of living of the rural population (Conyers, 1983). The tenets of this model were that with the expansion of the urban industrial economies surplus labour in the rural economy would be absorbed into the economy. In turn effective demand in the rural areas is increased through a trickle down of urban sector generated incomes. However, reviews of this approach in the late 1960s and early 1970s acknowledged that in actual fact poverty in urban centres had increased and no development had been recorded in the rural economy where surplus labour continued to increase (Waterston, 1982; Conyers, 1983). A new generation of literature emerged in the 1970s emphasising on the "Growth Centre", Growth Toint' policies or what is generally referred to as the "bright lights" theory. These were discussed within the context of decentralised development strategies. Recent studies, regrettably reveal that very little in terms of rural development has come out of these strategies. Small towns or Growth points were transformed into administrative centres for resource extraction and control rather than service centres for rural development (Pedersen, 1990).